Economic Survey 2011-12: Growth to pick up; rates to come down
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Following are the highlights of the Economy Survey 2011-12, a report card of the Indian economic scenario for current fiscal, presented by Finance Minister Pranab Mukherjee in Lok Sabha on Thursday:
* The country's economic growth estimated at 6.9 per cent in the current fiscal; growth momentum to pick up in next two fiscals to 7.6 per cent (2012-13) and 8.6 per cent in 2013-14.
* RBI expected to lower policy interest rates, as inflationary pressures expected to ease in coming months; A low interest rate regime to encourage investment activity and push forward economic growth.
* Steps required for deepening of domestic financial markets, especially corporate bond market and attracting longer-term inflows from abroad; Efforts at attracting dedicated infrastructure funds have begun.
* The growth rate of investment in the economy is estimated to have declined significantly; borrowing costs up due to a sharp increase in interest rates.
* High borrowing costs and increase in other costs affecting profitability and internal accruals.
* Slowdown in Indian economy largely due to global factors, as also because of domestic factors like tightening of monetary policy, high inflation and slower investment and industrial activities.
* Inflation high, but showing clear signs of slowdown by the year-end; Whole-sale food inflation down to 1.6 per cent in January 2012 from 20.2 per cent in February 2010.
* India remains one of the fastest growing economies of the world; Country's sovereign credit rating rose by a substantial 2.98 per cent 2007-12.
* Exports grew by 40.5 per cent in the first half of this fiscal and imports grew by 30.4 per cent; Foreign trade performance to remain key driver of growth.
* Forex reserves expanded further, covering almost the entire external debt stock to the country.
* Foodgrains production likely to cross 250.42 million tonnes; largely on back of increase in rice production.
* Agriculture and Services sectors expected to perform well; Industrial growth pegged at 4-5 per cent and improve further as economic recovery resumes.
* Global economy remains fragile and concerted efforts needed to restore stability and renewed growth; Steps needed for sovereign debt crisis, financial regulation, growth and job creation efforts and energy security, globally.
* India much more closely integrated with world economy' share of trade to GDP of goods and services has tripled between 1990-2010.
* A progressive deregulation of interest rates on savings accounts to help raise financial savings and improve transmission of monetary policy.
* Sustainable development and climate change becoming central areas of global concern and India too is equally concerned and engaged constructively in global negotiations.
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